That is, if we sell a piece for publication, are we no longer qualified once it is in print? Or once it has been sold?

The reason I ask is an author friend of mine just sold his 6 book series and asked the publisher about letting me do the cover art for his books. The publisher actually said they'd consider it, so I've got to put a portfolio and stuff together. IF they said yes, would I still able to enter up until the first book was released?

And yes, I'm determined to get the number of posts in the illustrator's forum into the double digits.

3. The Contest is open to new and amateur artists who have not been professionally published and paid for more than three black-and-white story illustrations, or more than one process-color painting, in media distributed broadly to the general public. The ultimate eligibility criteria, however, is defined with the word “amateur”—in other words, the artist has not been paid for his artwork. If you are not sure of your eligibility, please write an email or letter to the Contest Administration with details regarding your publication history. Include a self addressed and stamped envelope for the reply. You may also send your questions to the Contest Administration via email.

Note the emphasis on "more than". So you should be OK up to the second book. And I think you're eligible up to and including the quarter in which the disqualifying piece is published.